\  ZitfYl . 


|^vU 


Pamphlet  No.  19 
Series  of  1923  -24 


Europe  In  1923 

A  SURVEY 

by 

James  G.  McDonald 


Report  of  an  address 
at  the 

HOTEL  ASTOR 

NEW  YORK 


NOVEMBER  3,  1923 


Foreign  Policy  Association 


NINE  EAST  FORTY-FIFTH  STREET 

NEW  YORK 


Europe  In  1923:  A  Survey 


THE  FIRST  of  the  1923-2 U  Series  of  N.  Y.  Luncheon 
Meetings  of  the  F.  P.  A.  departed  from  the  long -established 
custom  of  presenting  two  or  three  widely  divergent  points 
of  view  on  one  given  situation.  Mr.  James  G.  McDonald, 
the  Chairman  of  the  Executive  Committee  of  the  F.  P.  A., 
spent  three  and  a  half  months  in  Europe  this  summer  on 
behalf  of  the  Association.  His  address  is  in  the  nature  of 
a  report  to  members  and  is  reprinted  in  response  to  a  num¬ 
ber  of  requests. 

Mr.  Charles  P.  Howland  presided  at  the  luncheon. 


MR.  HOWLAND 

npHE  FOREIGN  POLICY  ASSOCIATION,  whose  conductor 
|  for  the  nonce  has  laid  down  the  baton  in  order  to  appear 
A  as  a  solo  performer,  bids  you  welcome  on  the  first  of  these 
luncheons.  Rather  should  you  welcome  yourselves,  for  the 
greatest  factors  in  the  success  of  these  occasions  are  the  num¬ 
bers,  the  intelligence  and  the  non-partisanship  of  the  audience. 
In  a  world  where  prejudice  plays  so  large  a  part  in  the  deter¬ 
mination  of  domestic  politics  and  international  affairs,  it  is 
highly  important  that  there  should  be  an  organization  of  this 
character  and  audiences  such  as  you  furnish,  to  make  dispas¬ 
sionate  examination  of  the  facts,  and,  so  far  as  possible,  to 
adjust  their  ideas  in  accordance  with  the  development  of  the 
facts.  We  don’t  all  of  us  escape  prejudice.  Mr.  Robertson*  says 
“prejudice,  the  preference  of  our  habits  to  others’,  tempered 
more  or  less,  and  susceptible  to  magnetisms,  is  the  primary  or 
natural  state  of  every  one  of  us;  and  the  only  difference  is  that 
some  try  more  or  less  to  reduce  their  ideas  to  consistency,  while 
others  more  or  less  completely  abstain  from  the  attempt.” 

The  members  of  this  audience  doubtless  have  their  own 
prejudices  which  arise  out  of  sympathies  or  associations  with 
particular  groups,  or  out  of  larger  experiences  in  the  world. 
But  I  trust,  so  far  as  it  is  possible  for  the  human  intelligence 
to  do  so,  we  are  prepared  to  adjust  our  ideas  to  conform  to  the 
facts  which  are  here  developed.  And,  in  particular,  we  try  to 
avoid — and  the  speakers  here  try  to  avoid — that  sort  of  impres¬ 
sion  upon  the  mind  which  comes  from  the  use  of  catch-words 
bearing  connotations  established  in  other  connections.  You 
are  all  familiar  with  the  words  which  do  duty  in  stump  speaking 
and  in  legislative  halls  in  place  of  ideas.  As  Professor  Robinson 
points  out,  the  word  “Bolshevik”  has  come  to  mean  in  Wall 
Street  little  more  than  a  man  who  does  not  know  how  to  applaud 

*  An  English  essayist. 


2 


at  the  right  moment;  and  good  internationalists  like  ourselves 
try  to  avoid  the  use  of  those  phrases  which  are  merely  the  ex¬ 
pression  of  natural  sympathies.  Indeed,  your  minds  are  open 
to  the  appeal  which  Cromwell  made,  addressing  the  Kirk:  “I 
beseech  you  in  the  bowels  of  Christ,  think  it  possible  you  may 
be  mistaken.”  (Laughter.) 

The  general  theme  of  the  afternoon’s  discussion  is  a  pano¬ 
ramic  survey  of  the  European  situation,  which  will  be  a  proper 
approach  to  more  particular  items  of  that  situation  to  be  espe¬ 
cially  assigned  for  the  luncheons  throughout  the  year.  In  that 
situation  there  has  taken  place  within  the  last  month  the  most 
radical  of  changes.  We  are  no  longer  alone  discussing,  as  if  it 
were  the  crux  of  the  whole  situation,  the  struggle  focussed  in 
the  particular  geographical  locality  of  the  Ruhr,  or  even  the 
wider  question  of  reparations.  We  now  realize  the  discussion  to 
have  an  entirely  different  scope,  and  we  find  that  we  are  in  the 
presence  of  a  clash  of  titanic  forces  which  represent  the  struggle 
of  great  nations  to  improve  their  positions  relative  to  each 
other  in  the  world,  or  to  hold  the  positions  which  they  at  present 
occupy.  We  can  no  longer  confine  the  discussion  to  the 
technique  or  the  legality  of  the  invasion  of  the  Ruhr  or  to  the 
immediate  profits  to  be  had  from  that  particular  adventure; 
we  now  have  to  consider  and  to  discuss  the  position  and  the 
future' of  each  of  the  great  nations  relative  to  the  world  at  large 
and  relative  to  their  opponents  in  the  great  debate. 

The  great  center  of  that  discussion,  or  the  point  from  which 
we  start,  is  almost  always  the  relations  of  France  to  Germany. 
In  those  relations,  so  far  as  the  question  of  reparations  is  con¬ 
cerned,  it  has  been  more  or  less  assumed  in  public  discussion 
that  the  facts  are  ascertainable  by  dispassionate  experts,  that 
a  consideration  of  the  facts  by  dispassionate  experts  will  solve 
the  problem,  that  the  European  equilibrium  will  then  be  restored, 
Europe  will  go  to  work,  and  the  peace  of  the  world  will  be 
reasonably  assured.  I  venture  to  submit  that  there  is  one 
question,  a  cardinal  one,  that  no  commission  of  experts  can  solve 
and  upon  which  they  can  throw  practically  no  light  because  it 
is  a  question  of  fundamental  policy — and  that  is  the  question, 
applying  as  well  to  interallied  debts  as  to  the  particular  question 
of  reparations,  how  long  can  it  reasonably  be  expected  by  the 
world  at  large,  or  by  one  of  the  conquering  nations,  by  one  of 
the  creditor  nations  if  you  please,  that  a  debtor  nation  will 
continue  to  work  without  the  earnest  will  of  the  mass  of  the 
people  in  order  to  pay  a  debt  of  enormous  magnitude  to  the 
creditor  nation. 

To  make  a  specific  application  of  my  suggestion,  it  is  assumed 
on  the  French  side  that  there  is  no  reason  for  reducing  the 
amount  of  reparations  fixed  by  the  London  conference  in  May, 
1921,  at  132  milliard  gold  marks,  because  Germany  within  X 
years  can  pay  off  that  amount  of  reparations.  On  the  other 
hand,  it  is  assumed  that  an  examination  by  experts  of  the 
present  economic  situation  of  Germany  will  disclose  that  Ger¬ 
many  can  pay  Y  marks  in  reparations  in  some  number  of  years 
not  yet  determined,  and  that  that  will  be  the  amount  upon  which 


the  Reparation  Commission  will  fix  its  award  of  reparations. 
Neither  of  those  assumptions  takes  account  of  the  fact  that 
nobody  as  yet,  no  body  of  experts  and  no  governments  in  public 
debate,  have  directed  their  minds  to  the  question  how  long  one 
country  can  reasonably  be  expected,  expected  from  the  point 
of  view  of  creditors,  expected  from  the  point  of  view  of  the 
debtor,  expected  from  the  point  of  view  of  the  world,  to  work 
unwillingly  to  pay  an  indebtedness  to  another:  when  I  say  “ex¬ 
pected,^ ”  I  mean  for  what  period  of  time  is  it  feasible  to  arrange 
for  and  to  go  on  compelling  such  payments,  without  a  damage 
to  the  world's  political  order  or  the  world's  economic  organiza¬ 
tion  that  we  should  not  be  asked  to  suffer  in  order  that,  one 
country  may  derive  a  particular  benefit  ?  There  never  has  existed 
in  the  world  before  a  situation  in  which  one  country  imposed 
upon  another  country  the  burden  of  working  unwillingly  in 
order  to  pay  a  debt  for  a  long  period  of  years.  It  may  be  that 
Germany  can  be  made  to  work  as  people  say  she  should  be  made 
to  work  for  fifty  years ;  and  it  may  be  that  she  can  be  made  to 
work  for  not  more  than  twenty  years,  and  that  boys  now  com¬ 
ing  to  manhood  will  not  work  the  rest  of  their  lives  in  order  to 
pay  their  whole  surplus  earnings  to  a  foreign  creditor. 

It  is  impossible  to  say  what  the  period  of  financial  subordina¬ 
tion  should  be  until  that  problem  has  stood  the  test  of  public  dis¬ 
cussion.  That  is  a  problem  of  the  highest  political  order.  It  is 
also  an  economic  problem  so  complicated  and  speculative  that 
any  economist  might  well  shrink  from  expressing  his  opinion 
on  it ;  what  Germany  will  be  “able"  to  pay  to  France  in  the  year 
1963  or  the  year  1973  will  depend  upon  political,  industrial  and 
social  events  happening  in  the  meantime  in  every  part  of  the 
world  which  no  man  can  confidently  predict.  If  that  be,  as  I 
believe,  the  crux  of  the  reparations  problem,  it  will  not  be  solved 
by  experts,  American,  British  and  French,  determining  the 
present  economic  situation  of  Germany,  nor  will  it  be  solved  by 
arbitrarily  determining  that  Germany  can  in  the  course  of  time 
pay  a  certain  number  of  gold  marks,  and  ignoring  the  question 
whether  or  not  it  will  be  possible  to  make  her  work  that  long. 
The  experts  can  give  us  this  much  help :  they  can  advise  how  to 
get  her  economic  system  going  again,  when  she  can  begin  to 
pay  more  reparations  and  approximately  how  much,  and  on  the 
economic  side  of  the  question  can  tell  us  for  how  long  a  period 
of  time  in  the  remote  future  and  in  what  amounts  reparations 
can  be  fixed  against  her  without  seriously  diminishing  her  pro¬ 
ductive  capacity ;  but  the  main  factor  in  that  productive  capacity 
of  the  remoter  future,  remains  a  political  and  social  question  of 
incalculable  difficulty.  For  this  reason,  and  for  other  reasons 
of  a  more  directly  political  character  in  the  international  field, 
it  may  be  that  the  reparations  question  will  receive  less  atten¬ 
tion  in  the  future  than  it  has  in  the  past,  and  that  purely 
political  questions — chief  among  them  the  relations  of  France 
and  Germany  in  all  their  aspects — will  occupy  practically  the 
whole  of  the  field. 


4 


In  the  panoramic  survey  that  we  are  to  have  this  afternoon, 
the  first  speaker  is  the  leader,  chief  and  chairman  of  this  Asso¬ 
ciation,  Mr.  McDonald.  It  would  be  impertinent  to  give  you 
an  introduction  to  him.  (Applause.) 

MR.  JAMES  G.  MCDONALD 
ITH  THE  permission  of  the  Chairman,  I  shall  today  vio¬ 


late  two  highly  regarded  F.  P.  A.  luncheon  principles.  I 


?  '  expect  to  speak  somewhat  longer  than  the  usual  time  al¬ 
lotment  and  to  cover  a  broader  scope  than  is  usually  assigned  at 
any  single  luncheon-discussion.  I  shall  attempt  to  sketch  in  very 
rough  outline  some  of  the  chief  facts  and  relationships  of  inter¬ 
national  importance  as  they  exist  in  Europe  today — five  years 
after  the  close  of  the  war  which  was  to  make  the  world  safe 
for  democracy  —  the  war  for  the  rights  of  small  states  —  the 
war  to  end  war. 

I  am  more  than  conscious  of  the  rashness  of  any  effort  to 
present  a  unified  or  clear  picture  of  Europe  today.  I  know  only 
too  well  that  it  is  almost  impossible  to  be  entirely  sure  of  one's 
judgment  of  even  a  single  phase  of  that  situation.  Moreover,  I 
see  in  the  audience  and  at  this  table  here  many  men  and  wo¬ 
men  who  on  each  aspect  of  the  European  situation  are  much 
more  expert  than  I. 

Rash  in  any  event,  my  effort  would  be  completely  absurd, 
were  I  to  assume  to  base  it  primarily  on  personal  observation. 
No  one  can  see  more  than  an  infinitesimal  portion  of  Europe 
even  in  a  much  longer  visit  than  that  which  I  enjoyed  this  sum¬ 
mer.  My  conclusions,  therefore,  are  not  those  primarily  of  a 
traveler,  but  are  rather  the  residuum  of  some  traveling,  much 
reading  and  constant  contacts  with  men  and  women  from  all 
parts  of  the  world  and  of  the  most  diverse  points  of  view.  In 
this  survey  I  hold  no  preconceptions  as  sacred  and  no  dogmas 
as  incontestable  which  conflict  with  facts  as  they  exist  today. 
I  do  not  speak  for  the  Foreign  Policy  Association,  but  for  my¬ 
self  alone,  and  for  myself  today  only,  reserving  the  right  to 
change  my  opinions  tomorrow,  if  shifting  circumstances  and 
changing  conditions  make  today's  conclusions  untenable. 


Russia 


Any  survey  of  Europe  today  must  begin  with  Russia,  that 
vast  territory  with  its  more  than  one  hundred  millions  of  people 
which  for  three  centuries  has  been  an  enigmatic  and  portentous 
factor  in  European  politics.  The  events  of  the  last  seven 
years  have  confuted  the  prophets  both  to  the  right  and  to 
the  left.  Bolshevik  control  has  continued,  despite  daily  predic¬ 
tions  of  its  fall.  The  Communist  dictatorship  seems  as  secure 
today,  if  not  more  secure,  than  at  any  time  since  the  November 
revolution  of  1917.  But  Bolshevism  is  no  longer  Bolshevism. 
Maintaining  its  hold  on  the  government,  it  has  lost  its  soul, 
It  has  steadily,  under  the  pressure  of  stern  necessity,  fallen 
away  more  and  more  from  pure  Marxian  dogmas.  It  has 
not  achieved,  nor  does  it  now  give  promise  of  achieving  the 
Communist  millennium.  World  revolution  was  an  empty  dream, 


5 


but  the  restoration  of  Czarist  reactionaries  or  even  democratic 
emigres  has  been  just  as  futile  a  hope.  Instead,  a  form  of  state 
capitalism  and  peasant  proprietorship,  in  fact  if  not  m  theory, 
appears  to  be  the  basis  of  the  present  slow  and  painful  economic 

revival  of  Russia.  , 

Internationally,  Russia  is  not  today  of  the  first  importance, 

for  two  reasons :  J  .  J  .... 

(1)  She  has  by  force  of  arms  shown  that  interventionist  ac¬ 
tivities  are  futile  and  result  only  in  strengthening  Communism 
by  enabling  it  to  associate  itself  with  Russian  nationalism. 

(2)  Deeply  involved  in  solving  their  own  urgent  economic 
and  political  problems,  Russia’s  rulers  are  not  inclined  now,  nor 
are  they  able  to  play  a  decisive  role  abroad. 

Ultimately  Russia  must,  of  course,  again  be  a  decisive  force 
in  international  affairs,  either  for  sordid  and  unscrupulous  im¬ 
perialism,  as  before  the  war,  or,  as  we  hope,  for  enlightened  and 
generous  international  co-operation.  Already  through  the  repu¬ 
diation  of  Czarist  imperialism,  Communist  Russia  has  increased 
the  chance  of  peace  in  the  Near  and  Far  East,  and  through  the 
disclosures  of  the  intrigues  of  pre-war  diplomacy  has  strength¬ 
ened  the  forces  of  peace  everywhere. 

Turkey 

Turkey,  resurgent,  homogeneous  and  united,  gives  the  lie  to 
the  reiterated  tales  of  generations  that  the  Turk  is  unable  to 
cope  with  modern  political  forces.  Utilizing  to  the  full  the  petty, 
as  well  as  the  fundamental  jealousies  of  the  Allied  powers,  that 
able  leader  Mustapha  Kemal  has  built  up  a  quickened  and  jeal¬ 
ous  nationalism.  The  skill  of  Ismet  Pasha  at  Lausanne  secured 
for  the  Angora  pact — the  Turkish  Declaration  of  Independence 

_ international  recognition.  The  declaration  of  a  republic  only 

this  week,  with  Kemal  as  President  and  Commander  in  Chief, 
completes  one  of  the  most  startling  reversals  of  fortune  in 
modern  times.  Five  years  ago  a  subservient  and  pliant  Sultan 
signed  the  humiliating  Treaty  of  Sevres  dismembering  the 
Turkish  Empire.  Today  Kemal,  controlling  a  smaller  but  stronger 
Turkey,  deals  as  an  equal  with  the  Great  Powers. 

The  hundreds  of  thousands  of  Greeks,  Armenians  and  other 
Christians  in  Asia  Minor  are  either  to  be  deported  or  absorbed 
into  the  Turkish  life  about  them.  But  was  it  not  too  much  to 
expect  that  the  Christian  powers  of  Europe  would  put  Christian 
lives  and  property  above  national  self-interest?  We,  as  Amer¬ 
icans,  had  by  our  complete  repudiation  of  responsibility  in  post¬ 
war  Europe  set  them  a  perfect  example  of  national  selfishness. 
Yet,  after  all,  as  many  competent  students  believe,  the  peace  of 
the  Near  East  may  be  more  secure  after  the  painful  process 
of  interchange  of  populations  has  been  completed. 

Greece 

The  Balkans,  as  always,  present  a  confusing  picture  of  a 
situation  full  of  possibilities  of  strife.  Greece  was  successful 
beyond  her  strength  at  the  Peace  Conference.  The  high  abilities 
of  Yenizelos  and  his  close  personal  relations  with  the  chief  fig¬ 
ures  at  Paris  secured  for  his  country  more  than  it  could  hold 


6 


through  its  own  efforts.  The  Greek  military  expeditions  be¬ 
yond  Smyrna,  encouraged  by  Great  Britain,  the  return  of  Con¬ 
stantine,  the  falling  away  of  British  support,  are  some  of  the 
factors  which  led  to  the  disastrous  debacle  last  year.  The  en¬ 
suing  revolution  and  the  execution  of  the  Ex-Ministers  have  sup¬ 
plied  the  excuse,  if  not  the  reason,  for  the  continued  non-recogni¬ 
tion  of  the  new  Greek  government  by  the  United  States  and 
most  of  the  Great  Powers.  It  is  frequently  alleged  that  the  real 
reason  for  non-recognition  by  Washington  is  the  unwillingness 
on  the  part  of  our  government  to  pay  over  to  the  Greeks  the 
balance  of  the  1918  loan  said  to  be  due  her  and  to  amount  to 
about  38  millions  of  dollars. 

Bulgaria 

Bulgaria,  defeated  in  the  war,  denied  direct  access  to  the 
Aegean  and  with  her  other  frontiers  “rectified,”  is  today  in  the 
throes  of  a  reactionary  movement  away  from  the  former  peasant 
dictatorship  of  the  picturesque  and  courageous  but.  ruthless 
Stamboulisky.  Under  these  circumstances,  Bulgaria  is  an  un¬ 
stable  and  uncertain  neighbor. 

Roumania 

Roumania,  inflated  by  the  peace  treaties  at  the  expense  of 
her  neighbors  Hungary,  Russia  and  Bulgaria,  is  striving  to  con¬ 
solidate  her  gains.  Ill-treatment  of  her  enlarged  numbers 
of  alien  peoples  has  greatly  complicated  the  always  difficult 
political  situation.  Also,  as  in  Bulgaria  and  Russia,  the  de¬ 
mand  of  the  peasants  for  a  position  of  effective,  if  not  legal  own¬ 
ership  of  the  soil  is  changing  the  nature  of  the  state. 

Jugo-Slavia 

Jugo-Slavia,  struggling  with  the  difficult,  though  not  neces¬ 
sarily  insuperable  task  of  reconciling  the  clashing  interest  and 
aspirations  of  Croatians,  Slovenes,  Serbs  and  Montenegrins,  is 
forced  constantly  to  concern  herself  with  unsettled  and  aggra¬ 
vating  boundary  disputes  with  Italy. 

Austria 

Austria,  the  mutilated  and  dismembered,  given  up  as  a  hope¬ 
less  derelict  three  years  ago  because  the  Allies  would  not  consent 
to  her  union  with  Germany,  today  enjoys  a  degree  of  stability, 
economic  and  political,  unequalled  except  by  Czechoslovakia,  in 
all  Middle  Europe.  Of  course,  the  League  of  Nations’  experi¬ 
mental  receivership  may,  as  the  cynics  insist,  prove  to.be  only 
a  temporary  measure  of  relief.  But  the  prevailing  sentiment  in 
Vienna  is  that  only  serious  disorganization  in  Germany  can  pre¬ 
vent  Austria,  under  the  enlightened  leadership  of  the  Catholic 
Chancellor  Seipel  and  the  League  Commissioner,  Dr.  Zimmer¬ 
man,  working  her  way  to  a  permanently  satisfactory  position  in 
the  economic  life  of  southeastern  Europe. 

Hungary 

Hungary,  with  which  Austria  shared,  due  to  the  peacemak¬ 
ers,  the  distinction  of  being  the  most  dismembered  state  in  Eu¬ 
rope,  has  been  slower  than  her  former  associate  to  recognize 
that  the  pains  of  defeat,  though  bitter,  must  be  borne,  at  least 


7 


until  an  opportunity  for  redressing  the  issue  arises.  Hungary 
is  only  now  beginning  to  be  ready  for  the  application  of  the  same 
receivership  principle,  which  has,  temporarily  at  least,  saved 
Austria. 

Dr.  Benes,  the  moderate  and  intelligent  Foreign  Minister  of 
Czecho-Slovakia,  working  with  Sir  Arthur  Salter,  Director  of 
the  Economic  and  Finance  Section  of  the  League  of  Nations 
Secretariat,  has  cleared  away  some  of  the  political  difficulties. 
Two  or  three  weeks  ago  the  Reparation  Commission,  as  in  the 
case  of  Austria,  agreed  to  waive  the  reparation  claims  against 
Hungary  for  a  period  of  twenty  years  on  condition  that  the 
League  of  Nations  effect  economic  and  financial  reforms  similar 
to  those  carried  out  in  Austria.  The  next  step,  and  not  an  easy 
one  if  the  Austrian  precedent  is  followed,  will  be  an  international 
loan,  preferably  guaranteed  by  a  number  of  creditor  states. 

Unfortunately,  as  the  presence  in  this  country  now  of  Count 
Albert  Apponyi  and  Professor  Oscar  Jaszi  illustrate,  Hungary  is 
torn  by  two  rival  political  groups  —  the  conservative  and  reac¬ 
tionary  group  headed  by  the  dictator  Horthy,  for  which  the  dis¬ 
tinguished  and  brilliant  Apponyi  is  an  apologist,  and  the  demo¬ 
cratic  group,  many  of  whose  leaders,  like  Dr.  Jaszi,  are  in  exile. 

Czecho-Slovakia 

Czecho-Slovakia,  the  favorite  child  of  the  peacemakers, 
dowered  with  vast  industrial  and  adequate  agricultural  re¬ 
sources,  has  had  the  equally  great  but  more  unusual  good  for¬ 
tune  of  being  led  since  its  independence  by  two  statesmen  of* 
singular  moderation  and  wisdom  —  President  Masaryk  and  For¬ 
eign  Minister  Benes.  The  former  has  done  much  to  soften  the 
inevitable  animosities  of  political  factions  and  has  tried,  but  so 
far  with  slight  success,  to  lighten  the  disabilities  of  the  large 
German  minority.  He  has  dared,  too,  to  expropriate  the  estates 
of  many  of  the  larger  land-owners.  Benes,  the  creator  of  the 
Little  Entente,  has  done  more  perhaps  than  any  single  man 
towards  the  re-establishment  of  sane  and  normal  political  and 
economic  relationships  among  the  states  of  southeastern  Europe. 
Czecho-Slovakia,  though  doubtless  grateful  to  France  and  though 
probably  closely  allied  to  her,  is  not,  I  believe,  a  mere  satellite  of 
the  Quai  d’Orsay.  The  Corfu  crisis  showed  that  when  her  inter¬ 
ests  are  directly  at  variance  with  those  of  France,  Czecho-Slo¬ 
vakia  dares  to  take  her  own  line.  Under  leadership  such  as  she 
enjoys  today,  Czecho-Slovakia  should  continue  to  be  a  force  for 
reasonableness  and  genuine  international  co-operation. 

Poland 

Poland,  a  vast  sprawling  blotch  on  the  map,  has  a  much  more 
difficult  task  than  any  of  the  other  new  states.  Divided  for 
many  generations  between  Germany,  Russia  and  Austria-Hun¬ 
gary,  Polish  industrial,  political,  economic  and  even  cultural  re¬ 
lations  have  grown  fixed  in  three  sharply  divergent  directions 
—  drawn  as  they  were  inevitably  towards  three  different  capi¬ 
tals,  Petrograd,  Vienna  and  Berlin.  Acute  problems  of  land 
tenure  and  class  privileges,  a  tendency  towards  intolerant  treat¬ 
ment  of  minorities,  and  the  always  delicate  relations  with 


8 


Russia  add  to  the  difficulties  which  only  Polish  statesman¬ 
ship  of  the  very  highest  order  can  overcome.  Poland,  much 
more  than  Czecho-Slovakia,  seems  to  be  an  unquestioning  sup¬ 
porter  of  French  Continental  policies. 

Italy 

Italy,  rich  in  man  power,  but  poor  in  those  raw  materials 
essential  to  modern  industry  —  coal  and  iron  —  weakened  by  a 
corrupt  bureaucracy  and  an  inefficient  parliamentarianism, 
threatened  by  extreme  and  impractical  communism,  believing 
herself  duped,  if  not  betrayed,  by  her  fellow  Allies  at  the  Peace 
Conference,  on  the  verge  of  serious  internal  strife,  has  thrown 
herself  unreservedly  into  the  arms  of  the  man  who  promised  to 
heal  all  her  wounds  and  to  give  to  her  unity  and  power  to  enable 
her  to  expand  until  she  shall  again  assume  her  rightful  place 
among  the  nations  of  the  earth.  Fascismo  is  a  religion  rather 
than  a  political  party.  It  is  exalted  nationalism.  It  demands 
unselfish  devotion  to  the  state.  It  condemns  weakness  and 
exalts  strength.  It  despises  democracy,  ignores  liberty  and 
deifies  its  leader.  In  international  affairs  Mussolini  is  a  mer¬ 
curial  and  uncertain  factor.  Cynical  about  the  professions  of 
unselfishness  of  the  Great  Powers,  Mussolini  preaches  Italy’s 
manifest  destiny  as  the  dominant  Mediterranean  power. 

Spain 

Spain,  too,  has  long  enjoyed  the  doubtful  privilege  of  a  mere¬ 
ly  nominal  democracy.  Parliamentarianism  has  there  been  as 
sterile  and  bureaucracy  as  corrupt  as  in  Italy.  Sectionalism, 
whose  roots  go  back  centuries  beyond  1492,  when  the  Catholic 
kings  unified  the  Peninsula,  has  never  ceased  to  weaken  the 
state.  Expensive  and  disastrous  military  adventures  in  Mo¬ 
rocco,  were  only  the  last  blows  which  destroyed  a  sham  democ¬ 
racy  and  replaced  cabinet  government  by  a  military  despotism. 


Thus  throughout  southern  and  eastern  Europe,  the  new,  as 
well  as  the  old  states,  are  struggling  with  many  of  the  same 
problems.  The  peasants  everywhere  are  demanding,  and  in  many 
countries  securing,  effective  ownership  of  the  soil.  Feudal  land¬ 
lordism  has  received  a  blow  from  which  it  will  probably  not  re¬ 
cover.  International  Socialism  is  everywhere  weakened  by  in¬ 
ternal  dissensions  and  factious  dogmatisms.  Parliamentarian¬ 
ism  and  democracy  are  generally  discredited,  even  where  not 
openly  displaced  by  dictatorships.  The  normal  recuperative 
forces  of  agricultural  industrial  and  commercial  life  are  every¬ 
where  cramped,  sometimes  by  the  inequities  of  the  peace  set¬ 
tlement  and  more  often  by  the  artificial  restraints  and  barriers 
set  up  by  ultra-nationalists.  None  the  less,  the  chief  obstacle 
to  the  maintenance  of  peace,  stability  and  orderly  progress  in 
southern  and  eastern  Europe  lies  in  the  unsettlement  of  eco¬ 
nomic  and  political  relations  in  western  Europe.  The  storm 
center  is  not  the  Balkans,  Russia  or  even  Italy.  It  is  in  the 
Rhineland  and  the  Ruhr. 


9 


Why  Is  There  No  Peace? 

Why?  Why  have  Great  Britain  and  France  steadily  drifted 
apart  since  1918  until  today  the  Entente  Cordiale  is  a  mere  name 
to  hide  the  faint  shadow  of  what  was  once  an  effective  alliance  ? 
Why  is  the  relationship  between  France  and  Germany  much 
more  embittered  than  on  Armistice  Day?  Why  is  the  problem 
of  reparations  no  nearer  a  solution  than  four  and  a  half  years 
ago  when  President  Wilson  made  his  fateful  decision  to  permit 
the  inclusion  of  Allied  pensions  and  separation  allowances?  Why 
has  Germany  been  reduced  to  the  point  where  for  the  immediate 
present  at  any  rate  she  can  make  no  cash  reparation  payments 
at  all  ?  Why  is  the  Reich  today  facing  the  prospect  of  political 
dismemberment  and  economic  demoralization?  Why  has  the 
peace  for  which  the  world  fought  given  place  to  danger  of  even 
greater  wars? 

At  the  risk  of  differing  with  all  the  experts  who  are  gathered 
here  today,  I  venture  to  answer  my  own  questions.  The  fol¬ 
lowing  are  in  my  judgment  some  of  the  reasons  for  the  unhappy 
state  of  Europe  today: 

(1)  The  inclusion  in  the  bill  of  damages  against  Germany 
of  items  which  the  clear  intent  and  meaning  of  the  pre-armistice 
agreement  precluded — pensions  and  .separation  allowances.* 

(2)  The  failure  to  fix  a  definite  sum  for  Germany’s  obliga¬ 
tions  at  the  Peace  Conference. 

(3)  The  final  fixation,  May,  1921,  by  the  Reparation  Com¬ 
mission  of  a  sum  ($33,000,000,000)  which  neutral,  as  well  as 
British  and  American  opinion  has  declared  to  be  fantastic. 

(4)  The  failure  of  the  United  States  to  take  its  place  in  the 
Reparation  Commission  and  play  its  role  of  moderator  outlined 
for  it  in  the  minds  of  the  American  peacemakers. 

(5)  The  failure  of  the  United  States  and.  Great  Britain  to 
guarantee  France  against  external  aggression  through  the 
triple  alliance,  and  the  resulting  French  fear  of  overwhelming 
revenge  from  Germany. 

(6)  The  rapid  demobilization  by  the  United  States  and 
Great  Britain  and  the  literal  withdrawal  of  the  former  and  the 
virtual  withdrawal  of  the  latter  from  Europe. 

THESE  conditions  in  effect  authorized  and  empowered 
France  under  the  plausible  plea  of  security  and  reparations  to 
destroy  Germany,  if,  as  was  inevitable,  the  latter  proved  unable 
to  pay  an  impossible  debt.  Only  the  united  and  energetic  moder¬ 
ating  efforts  of  Britain  and  the  United  States  could  have  pre¬ 
vented  the  treaty  being  used  as  a  tyrannous  and  destructive 

*  These  items  are  the  capitalization,  estimated  on  the  French  scale  of  pensions  and  al¬ 
lowances,  of  payments  made  and  to  be  made  by  the  allied  governments  to  the  families  and 
dependents  of  allied  soldiers  because  of  death,  physical  disability  or  absence  from  home 
during  mobilization.  General  Smuts  as  legal  adviser  to  the  British  Government  at  the 
Peace  Conference  argued  that  these  expenditures  could  legally  be  included  in  the  bill  against 
Germany  under  the  pre-Armistice  agreement.  His  brief  is  sometimes  said  to  have  been  the 
chief  influence  which  decided  Wilson  to  accept  their  inclusion.  However,  there  is  reason 
to  believe  that  the  American  delegation  was  convinced  that  even  without  pensions  and  sep¬ 
aration  allowances,  the  legal  reparation  bill  against  Germany  would  be  larger  than  that 
government’s  capacity  to  pay  and  that,  therefore,  the  inclusion  of  these  additional  items 
would  not  add  to  Germany’s  real  burden  but  would  be  merely  a  means  of  re-apportioning  the 
German  payments  among  the  Allies — a  matter  which  solely  concerned  the  Allies — and  that, 
therefore,  the  question  of  the  legality  of  these  items  was  really  academic.  As  a  matter  of 
fact.  France’s  share  was  thereby  reduced  from  approximately  7  5  per  cent  to  52  per  cent. 


10 


weapon.  Only  an  effective  British  and  American  pledge  of  se¬ 
curity  for  France  would  have  left  her  no  reason  nor  excuse  for 
her  uncompromising  utilization  of  the  destructive  power  of  the 
Treaty. 

Has  Germany  Shirked? 

But  has  not  Germany  flagrantly  shirked?  Have  not  her 
industrialists  sabotaged  the  efforts  of  any  Chancellor  who,  like 
Rathenau,  tried  sincerely  to  meet  Germany’s  obligations?  Has 
not  the  inflation  of  the  mark  to  the  point  of  worthlessness  been 
a  part  of  a  deliberate  plot  to  avoid  reparation  payments  ?  Have 
not  vast  building  enterprises  been  carried  on  throughout  Ger¬ 
many  while  payments  to  the  Allies  have  been  refused?  Are 
there  not  billions  of  dollars  of  German  credits  abroad  available 
for  indemnity  payments? 

No  informed  and  impartial  observer  will  give  an  unquali¬ 
fied  denial  to  all  these  charges.  Germany  has,  in  fact,  probably 
not  done  her  utmost.  Why  should  she?  At  no  time  since  the 
Armistice  has  a  fulfillable  and  comprehensive  program  been  of¬ 
fered  her.  Yet  despite  this  handicap,  the  Reparation  Commis¬ 
sion  has  itself  credited  Germany  with  payments  amounting  to 
more  than  a  billion  and  a  half  dollars,  while  American  experts 
like  Moulton  and  McGuire  in  their  recent  volume  “Germany’s 
Capacity  to  Pay,”  issued  under  the  auspices  of  the  Institute  of 
Economics,  estimate  that  Germany  has  turned  over  values  to 
the  extent  of  more  than  five  billions  of  dollars.  Keynes  in  an 
independent  investigation  arrives  at  a  figure  almost  identical 
with  that  of  the  Institute  of  Economics. 

How  does  this  effort  compare  with  that  made  by  France  in 
1871-73?  Keynes  estimates  that,  allowing  for  the  changing 
value  of  money  and  the  relative  population  and  wealth  of  France 
and  Germany  in  1871  and  1919,  the  German  payment  of  five 
billions  of  dollars  represents  a  per  capita  burden  on  the  German 
people  of  more  than  double  that  imposed  on  the  French  people 
by  their  payment  of  a  billion  dollars.  Nor  should  we  forget  that 
the  French  indemnity  was  paid  after  a  war  which  was  not  much 
more  than  a  skirmish,  which  left  French  resources,  save  Alsace- 
Lorraine,  almost  intact,  while  the  larger  payment  of  Germany 
has  followed  an  exhausting  struggle  of  more  than  four  years 
in  which  she  lost  the  bulk  of  her  foreign  assets.  Under  these 
circumstances,  it  is  obvious  that  Germany  has  made  an  effort 
to  pay  which  compares  most  favorably  with  that  of  France  and 
under  conditions  incomparably  more  difficult. 

Inflation 

But  what  of  inflation?  American  and  British  experts  on  the 
Reparation  Commission  with  whom  I  talked,  say  that  they  do 
not  believe  it  was  deliberate.  Moreover,  while  a  few  adventur¬ 
ous  speculators  and  gigantic  manipulators  have  made  enormous 
profits  as  a  result  of  the  depreciation  of  tlje  mark,  the  bulk  of 
the  German  people  has  been  impoverished.  Though  the  German 
government  has  frequently  been  weak  and  inefficient  in  imposing 
financial  reforms  and  has  never  been  able  effectively  to  curb  the 
rapacity  of  industrialists  typified  by  Stinnes,  the  flight  of  the 


11 


mark  has  been  primarily  the  result  of  conditions  beyond  that 
governments  control. 

Buildings 

It  is  true  that  in  Germany  there  has  been  considerable  build¬ 
ing  of  new  factories,  business  blocks,  canals,  etc.,  but  the 
amount  has  been  vastly  exaggerated  and  in  any  event  such 
developments  were  paid  for  by  paper  mark  profits  which  would 
have  been  almost  worthless  for  reparation  payments.  More¬ 
over,  should  Germany  not  be  encouraged  to  improve  her  indus¬ 
trial  plant  and  equipment  so  that  she  may  be  able  to  manufac¬ 
ture  more  advantageously  for  the  world  market  and  thus  to 
secure  the  necessarily  enormous  excess  of  exports  over  imports, 
if  the  Allies  really  want  her  to  be  put  in  a  position  to  pay  even 
greatly  reduced  reparations? 

German  Balances  Abroad 

But  has  not  Germany  huge  gold  balances  abroad?  Undoubt¬ 
edly  there  are  German  balances  abroad.  How  much  no  one  can 
tell  exactly.  Estimates  range  all  the  way  from  that  of  Keynes 
of  approximately  half  a  billion  dollars,  through  that  made  some 
months  ago  by  McKenna,  a  former  Chancellor  of  the  British 
Exchequer,  of  about  a  billion  dollars,  to  those  of  other  students 
up  to  an  amount  of  two  billions  of  dollars.  Of  course,  there  are 
still  larger  estimates,  but  I  think  no  serious  student  of  the 
problem  has  put  the  figure  higher.  Even  if  there  were  two 
billions  of  German  credits  abroad,  what  would  it  signify?  In 
any  event  a  large  percentage  of  such  balances  must  be  left 
intact  if  Germany’s  foreign  trade  is  to  continue  at  all.  Unless 
a  German  manufacturer  is  permitted  to  accumulate  credits 
abroad,  he  cannot  possibly  pay  for  the  raw  materials  essential 
for  his  industry.  As  to  the  percentage  of  the  balances  not 
necessary  for  essential  purchases  abroad,  there  seems  no  practi¬ 
cable  way  by  which  any  German  government  could,  if  it  would, 
against  the  will  of  the  owners,  put  its  hands  on  these  surplus 
funds.  As  Reginald  McKenna  has  aptly  said,  only  by  making 
Germany  so  prosperous  that  German  business  men  will  them¬ 
selves  prefer  to  use  their  surplus  balances  in  their  own  busi¬ 
nesses  at  home  can  these  sums  be  made  available  even  in  this 
indirect  way  for  reparation  payments. 

France’s  Attitude  Towards  Germany 

Germany  then  has  not  been  guilty  of  the  extreme  charges 
of  shameless  evasion  and  chicanery.  How  have  her  efforts  at 
fulfillment  been  answered  by  the  Allies,  and  more  particularly 
by  France?  The  record  is  too  plain  to  be  mistaken — not  by  a 
spirit  of  helpful  co-operation,  but  rather  by  ultimatum  after 
ultimatum,  culminating  in  the  occupation  of  the  Ruhr.  This 
seizure  of  the  industrial  heart  of  Germany  was  of  doubtful 
legality  and  in  clear  violation  of  the  intent  of  the  Treaty  as 
understood  by  Germany,  by  the  present  British  government  and 
by  those  Americans  with  whom  I  have  talked  who  had  most  to 
do  with  framing  that  particular  section  of  the  Treaty.  It  set 
an  example  of  violence  which  has  weakened  seriously  the  moral 
basis  of  the  Treaty.  But  when  after  nine  months  the  Germans, 


12 


unable  longer  to  supply  food  and  clothing  to  the  inhabitants  in 
the  Ruhr,  surrendered  passive  resistance,  did  Poincare  as  he  had 
promised,  make  the  occupation  invisible?  He  did  not.  Did  he 
move  an  iota  to  save  the  face  of  the  Chancellor  who  had  dared 
to  take  on  himself  the  odium  of  an  unconditional  surrender? 
He  did  not.  Instead  of  listening  to  Stresemann's  appeal  that 
consideration  be  given  to  Germany's  latest  reparation  offer, 
France  answered  by  flagrant  and  open  encouragement  of  the 
Separatists  in  the  Rhineland  and  this  at  the  very  moment  when 
food  and  unemployment  riots  in  the  German  industrial  centers, 
communism  in  Saxony  and  reaction  in  Bavaria  were  testing  the 
Berlin  government  to  the  uttermost. 

Hughes'  Proposal 

Then  came  Secretary  Hughes'  skillfully  phrased  and  very 
significant  acceptance  of  Lord  Curzon's  suggestion  of  an  inter¬ 
national  conference  on  Germany's  capacity  to  pay.  Poincare 
immediately  announced  his  acceptance,  but  now  he  so  qualifies 
this  acceptance,  so  hedges  it  about  with  reservations  and  limita¬ 
tions  as  seriously  to  lessen  the  conference's  scope  and  its  oppor¬ 
tunity  for  real  usefulness.  Indeed  the  Paris  press,  openly 
cynical  of  the  whole  proposal,  joyfully  declared  that  their  gov¬ 
ernment  had  achieved  a  distinct  diplomatic  victory  by  accepting 
the  conference  suggestion  merely  as  a  means  of  avoiding  com¬ 
plete  isolation  and  with  no  intention  of  permitting  the  conferees 
to  modify  Germany's  total  obligations  or  to  lessen  France's 
stranglehold  on  German  industrial  life.  The  latest  news  from 
Washington  contains  the  plain  intimation  from  the  Administra¬ 
tion  that  they  are  so  concerned  by  the  Poincare  reservations 
that  they  are  beginning  to  question  whether  the  conference 
should  be  held  at  all. 

Britain 

Where  does  Britain  stand  today?  Slowly  but  steadily  Brit¬ 
ish  opinion  has  during  the  last  five  years  moved  towards  a  policy 
of  conciliation  and  moderation.  Lloyd  George,  a  veritable  weath¬ 
ercock  in  his  instinctive  and  always  ready  response  to  the  shift¬ 
ing  winds  of  public  opinion,  has  forgotten  his  khaki  election,  his 
slogans,  “Hang  the  Kaiser,"  “Make  Germany  Pay  the  Cost  of  the 
War."  Just  as  then  he  capitalized  and  voiced  all  the  hatreds  and 
passions  of  four  years  of  strife,  so  now  he  is  capitalizing  and 
voicing  Britain's  utter  longing  for  a  real  peace,  for  an  opportun¬ 
ity  to  work,  for  an  opportunity  to  resume  the  normal  course  of 
international  trade.  Now,  as  then,  he  sounds  a  note  which 
awakens  ardent  response  and  the  deepest  feelings  of  his  country¬ 
men.  Similarly,  Stanley  Baldwin  and  Lord  Curzon  in  differing 
tones,  as  befits  their  personal  predilections  and  their  official  posi¬ 
tions,  voice  opinions  essentially  similar  to  those  of  our  departing 
guest. 

Why  then  does  not  Britain  take  effective  steps  to  carry  out  its 
changed  policy  on  the  Continent?  The  answer  is  simple,  though 
three-fold : 

(1)  France  is  clearly  within  her  legal  rights  when  she  re¬ 
fuses  to  consider  any  reduction  of  the  German  debt.  Britain 


13 


cannot  deny  this.  On  this  point  it  is  not  France  which  has 
changed.  It  is  the  British  and  neutral  opinion  of  the  world. 
France  stands  where  she  stood  at  Paris  m  the  spring  of  1919- 
The  world  has  moved  beyond  her,  while  she  continues  to  ask  tor 

the  letter  of  her  bond. 

(2)  France  has  the  military  power  —  as  witness  her  separa¬ 
tist  activities  and  the  occupation  of  the  Ruhr  —  to  insist  on  her 
interpretation  of  her  rights  under  the  Treaty,  even  though  Ger¬ 
many  be  broken  as  a  result.  Britain  has  no  effective  answer  to 
the  superb  French  army,  aeroplanes  and  submarines. 

(3)  British  opinion  is  not  sufficiently  unanimous  to  permit 
the  British  government  to  move  directly  towards  a  rapproche¬ 
ment  with  Germany.  Extreme  protectionists  and  mercantilists 
who  believe  that  Britain  would  profit  by  the  destruction  of  her 
best  customer  have  joined  hands  with  those  who  still  assess  it 
a  virtue  to  hate  the  Hun,  and  together  they  demand  through  the 
thunderous  tones  of  the  Rothemere  press  that  the  Entente  be 
maintained.  In  a  less  democratic  age,  before  the  force  of  or¬ 
ganized  governmental  war-time  propaganda  had  reached  its 
present  appalling  efficiency,  a  British  government  would  long 
ago  have  much  more  radically  shifted  its  policy  to  harmonize 

with  its  obvious  material  interests.  # 

Because,  therefore,  of  French  legal  rights,  because  of  French 
military  power  and  because  of  a  lack  of  British  unity,  the  Brit¬ 
ish  government  confesses  to  impotence  on  the  Continent.  Yet, 
despite  these  handicaps  only  the  blind  will  deny  that  Britain  is 
drifting  steadily  away  from  her  late  ally  towards  her  recent 
enemy  But  does  a  British  policy  of  drifting  towards  an  open 
breach  with  France  and  towards  a  new  alignment  mean  peace 
or  merely  increased  bitterness  and  ultimately  new  wars  ?  No 
one  can  tell.  If  Britain  were  prepared  to  move  promptly  and  de¬ 
cisively  the  force  of  disintegration  might  be  checked.  If  we, 
as  a  people,  were  prepared  to  do  more  than  to  offer  our  advice 
and  emphasize  our  disinterestedness,  Britain  could  and  would, 
I  am  convinced,  go  almost  any  length  to  work  out  with  us  a  com¬ 
mon  program.  Such  a  program  achieved,  an  irresistible  appeal 
could  be  made  to  the  better  judgment  of  the  French  people. 

Yet  Britain  is  not  ready  to  move  effectively.  We  are  not 
ready  to  help  substantially.  Poincare  alone  knows  his  mmd.  He 
alone  sees  his  path  clear  before  him.  He  alone  has  the  courage 
and  the  singlemindedness  of  purpose  to  follow  his  chosen  way 
to  its  logical  end. 


French  Opinion 

But  is  it  possible  that  any  considerable  body  of  French  opin¬ 
ion  looks  with  equanimity  upon  the  political  and  economic  dis¬ 
organization  of  Germany?  Yes.  French  traditional  claims  to 
the  Rhine  as  the  natural  frontier  have  not  been  forgotten.  Some 
French  leaders  look  forward  to  a  Germany  as  weak  and  decen¬ 
tralized  as  in  1848.  American  and  British  talk  of  the  need  for 
restoring  the  economic  equilibrium  of  Europe  falls  on  deaf 
French  ears.  Many  French  leaders  do  not  believe  that  the  re¬ 
storation  of  Germany  to  her  pre-war  economic  position  in  Eu¬ 
rope  is  inevitable,  necessary  or  desirable.  If  modern  industrial 


14 


and  political  Germany  was  created  by  Bismarck,  it  can  be  disin¬ 
tegrated  by  Foch.  Realists  in  French  politics  remember  that  if 
Germany  invaded  France  in  1914,  Louis  Napoleon  plotted  the 
weakening  of  the  half -formed  German  Empire  in  1870;  that 
Napoleon  Bonaparte,  Louis  the  Fourteenth  and  Richelieu  have 
all  had  as  their  aim  the  prevention  of  a  united  and  strong  Ger¬ 
many. 

I  make  no  charges.  I  do  not  know  the  mind  of  Poincare.  ^  I 
merely  state  that  in  my  judgment  the  logical  end  of  Poincare’s 
present  policy,  as  evidenced  by  his  actions  and  his  speeches  is, 
if  unchecked,  the  political  and  economic  disintegration  of  the 
German  Reich. 

A  Suggestion 

Is  there  no  practicable  way  to  check  this  policy  or  to  modify 
it  in  the  common  interest  of  mankind  and  in  the  interest  of 
France  itself?  I  am  one  of  those  who  believe  that  the  present 
policy  of  France  will,  if  unchanged,  end  in  disaster,  not  only  for 
middle  Europe,  but  also  for  France.  Does  the  League  of  Na¬ 
tions  offer  a  way?  I  wish  I  could  say  “yes.”  The  League  has 
not  been  able  to  ameliorate,  as  President  Wilson  hoped,  the 
rigors  and  the  injustices  of  the  peace  settlement.  It  has  not 
been  able  to  exert  its  jurisdiction  over  the  most  flagrant  source 
of  danger  to  world  peace.  Whatever  the  League’s  ultimate  ca¬ 
pacity  may  be,  we  must  confess  that  today,  it  can  do  nothing 
which  France  is  not  willing  for  it  to  do. 

You  may  answer,  “had  the  United  States  been  there,  the  is¬ 
sue  would  have  been  different.”  Perhaps,  but  we  were  not  there 
and  candor  again  requires  the  confession  that  we  seem  further 
from  the  League  today  than  at  any  time  since  1919. 

We  turn  then  to  Secretary  Hughes’  suggestion  of  an  interna¬ 
tional  conference  to  determine  Germany’s  capacity  to  pay.  In¬ 
complete,  because  Mr.  Hughes  refused  to  permit  the  discussion 
of  inter-Allied  debts,  his  proposal  has  been  further  weakened  by 
Poincare’s  emasculating  reservations.  None  the  less,  the 
Hughes  idea  in  its  present  or  some  other  form,  seems  to  be  the 
only  immediately  practicable  step  towards  breaking  the  deadlock 
which  is  devastating  Europe.  Our  public  opinion  should  de¬ 
mand  that  the  Administration  insist  on  the  proposed  investiga¬ 
tion,  even  if  there  should  not  be  that  unanimity  of  opinion 
among  the  Allies  which  Mr.  Hughes  desired.  Only  the  fixation 
of  Germany’s  capacity  on  the  basis  of  proved  fact  can  offer  a 
rational  basis  for  the  settlement  of  the  reparations  problem  and 
that  of  inter-Allied  debts.  Even  France  should  not  be  permitted 
to  stand  in  the  way  of  such  a  solution. 

Let  us  also  urge  our  government  to  take  the  lead  in  educat¬ 
ing  our  people  to  a  willingness  to  be  generous  in  the  treatment 
of  our  Allied  debtors,  if  that  can  be  made  the  price  of  an  orderly 
and  genuinely  peaceful  Europe.  Let  us  recognize  that  disinter¬ 
estedness  and  impartiality  is  not  enough.  We  must  be  prepared 
to  bear  our  share  of  responsibility.  Above  all  things,  let  us  get 
into  the  habit  of  looking  the  facts  of  our  international  relations 
in  the  face.  Let  us  deal  with  them  as  realities  and  not  cloud  our 


15 


thinking  by  sentimental  or  romantic  visions.  America  can  and 
will  once  more  when  it  sees  the  way,  rise  to  the  heights  of  en¬ 
lightened  and  unselfish  leadership.  Let  us,  whatever  our  own 
particular  panacea  or  formula  may  be,  unite  in  as  thoroughgoing 
a  study  of  the  facts  of  our  problem  as  lies  within  our  power. 

This  study  is  the  F.  P.  A.’s  primary  task.  It  is  worthy  of 
our  utmost  strength. 


FOREIGN  POLICY  ASSOCIATION 

For  a  Liberal  and  Constructive  American  Foreign  Policy 

NATIONAL  HEADQUARTERS 
9  East  Forty-fifth  Street,  New  York  City 


What  it  is: 

— “one  of  the  most  active  agents  in  the  political 
education  of  the  people  of  the  United  States  in 
respect  to  foreign  affairs.”  — New  Republic 

— “an  influence  for  constructive  thinking  ” 

— Herbert  Adams  Gibbons 

— “one  of  the  few  living  cells  in  the  great  corpse 
of  public  opinion”  — R.  L. 

— A  N  D  why: 

“A  democracy  which  undertakes  to  control  its  own 
foreign  relations  ought  to  know  something  about 
the  subject”  — Elihu  Root 


EXECUTIVE  COMMITTEE 


JAMES  G.  McDONALD,  Chairman 


BRUCE  BLIVEN 
COURTENAY  CROCKER 
HUGHELL  FOSBROKE 
ROBERT  H.  GARDINER 
CARLTON  J.  H.  HAYES 
CHARLES  P.  HOWLAND 
PAUL  U.  KELLOGG 


GEORGE  M,  La  MONTE 
MRS.  HENRY  GODDARD  LEACH 
MISS  RUTH  MORGAN 
RALPH  S.  ROUNDS 
MRS.  V.  G.  SIMKHOVITCH 
MRS.  WILLARD  D.  STRAIGHT 
MRS.  CHARLES  L.  TIFFANY 
MISS  LILLIAN  D.  WALD 


CHRISTINA  MERRIMAN,  Secretary  GEORGE  M.  La  MONTE,  Treasurer 

ESTHER  G.  OGDEN,  Membership  Secretary 


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